Intentionally Designed Endowment Roundtable | Sept. 8th, 2017, Berkeley, CA
- Building on the success of previous events, the Intentional Endowments Network, in partnership with the Center for Responsible Business at Berkeley-Haas and BlackRock, is pleased to host an Intentionally Designed Endowment Roundtable for endowment decision-makers and stakeholders from institutions interested in enhancing their leadership on sustainable investing. The event will focus on low-carbon strategies and climate solutions.
The SRI Conference l November 1-3, 2017, San Diego, CA
- The SRI Conference – on Sustainable, Responsible, Impact Investing serves thought leaders and investment professionals working in the ESG, Shareowner Engagement, and Impact Investing space. Together, we are catalyzing the shift to a more socially equitable and environmentally sustainable future. We deliver education and inspiration — in between legendary networking opportunities.
Higher Education Sustainable Investing News
Our Commitment to a Sustainable Future l Australian Catholic University
- Australian Catholic University (ACU) demonstrated its commitment to a sustainable future on Tuesday 25 July by securing $200 million in investor funds earmarked for projects that deliver positive social and environmental outcomes. ACU raised the funds through the sale of Sustainability Bonds to some of Australasia’s biggest institutional investors. The ACU Sustainability Bonds are the first Sustainability Bonds issued in Australia. These Sustainability Bonds benefit from a second party opinion from Sustainalytics and financial assurance provided by KPMG.
UniSuper Brings Investment Option In-House l Financial Standard
- UniSuper, the $60 billion fund for Australia's higher education and research sector, is appointing an active strategy for its once passively managed sustainable investment option. Under this important shift management of the Global Environmental Opportunities (GEO) investment option will be internalised and the MSCI ESG Research Sustainable Impact Metrics database adopted for portfolio construction.
Sustainable, Responsible, Impact & ESG Investing
Bloomberg Brief l Sustainable Finance
- This week's Bloomberg Brief highlights how development banks are bucking a general downward trend in clean energy investment, pumping billions into renewables and energy efficiency; Fannie Mae sells the first U.S. commercial mortgage-backed security wholly backed by green loans; Green bond assurance rises but at the expense of disclosure; BlackRock cuts fees on ESG ETFs; and JetBlue's Head of Sustainability Sophia Mendelsohn refocuses sustainability reporting for its investors.
Sustainability as a Source of Growth l Investor Daily
- Long-term social, demographic, environmental and resource challenges are creating plenty of opportunities, writes Pengana Capital’s Adam Myers in this article – as well as growing risks for sectors that deplete human and natural capital.
- Benchmarking a building’s energy outputs and developing a strategy to implement more sustainable practices will result in a more efficiently operated asset, which in turn yields improved ROI through higher rents, quicker absorption and lower vacancies, and lower overall operating costs. In addition, the incremental cost of implementing more energy-efficient building systems is often negligible when you consider the many available utility rebates and government incentives. But there’s more to it: the reality is that the value of energy efficiency and sustainability can prove to be greater, more lucrative or more complex than it appears on the surface. This article explores some of the “hidden” reasons why it pays to invest in energy optimization.
- Sustainability is basically about identifying well-managed companies that have a long term view,” continues Thorendal, “and where sustainability aspects are part of their business model even though it is not necessarily expressed as sustainability.” For an investor, the first step of identifying these well-managed companies is integrating ESG-factors in a financial analysis. An investor should also understand how the asset managers apply ESG factors in their own analysis. This article describes what investors should look for in an investment manager.
- Institutional investors take note: “Doing Well by Doing Good” is not just a sales pitch private wealth advisers use to court millennial clients. The global economy’s interconnected nature has turned every business decision, even the nonfinancial ones, into forces that can have far-reaching and unexpected effects on investment returns. Pension plans and other large, long-term investors are acting accordingly. One such institution is CalSTRS, which oversees a portfolio of about $208 billion. At the 62nd Annual Financial Analysts Seminar, CalSTRS CIO Christopher J. Ailman discussed the importance of integrating ESG considerations into the investment decision-making process. This article discusses his talk.
MSCI Reports Strong Growth in ESG Investing l Just Means
- ESG investing is fast becoming a mainstream area within the investment industry. An increasing number of investors are now adopting the Principles for Responsible Investment (PRI), and choosing companies that score high on ESG performance. Investors inclined towards responsible investments operate on the belief that in the long run addressing ESG issues will preserve and boost their portfolio returns. In sync with this trend, MSCI says it is experiencing increasingly strong demand for a combination of ESG and factor indices. The company has reported a $2.7 million or 24.7 percent increase in second-quarter ESG revenues to $13.7 million in its Q2 earnings presentation.
- In this Q&A, Richard Gröttheim, Chief Executive Officer at AP Fonden 7, and Niklas Ekvall, CEO of AP4, discuss gender diversity, good governance and how institutional investor inquires in gender diversity positively affect ESG integration.
- The Blue Haven Initiative was one of the earliest family offices to commit itself to 100% mission-aligned investing. At more than $500 million, it’s one of the biggest to make that commitment. And it’s one of the first to share its challenges publicly. In this edition of the Returns on Investment podcast, the principals, Liesel Pritzker Simmons and Ian Simmons, share their investment philosophies, their favorite investments, and the myths about impact investing that they’d list to bust.
- Millennials are driving the nearly $9 trillion sustainable investing market, according to a survey of 1,000 investors by Morgan Stanley's Institute for Sustainable Investing. Despite recent strides in the space, the belief that sustainable investing solutions deliver weaker returns remains prevalent.
- Impact investors have poured more than $8 billion into projects that support sustainable land management, and now more money is also finding its way into sustainable fishing. This month, a new partnership providing equity to sustainable small-scale fishing-related enterprises in Philippines and Indonesia, has made its first investment in a Filipino fishing processing and exporting group.
- With so many investors applying ESG principles to equity investments, it was only a matter of time before the bond universe got in on the act. A new fixed income exchange-traded fund, the VanEck Vectors Green Bond ETF allows bond investors to emphasize ESG virtues in the bond market. The VanEck Vectors Green Bond ETF debuted in March and could serve to illuminate investors to the potential of green bonds, a still small but rapidly growing part of the bond market. GRNB, the first ETF in the U.S. dedicated to green bonds, follows the S&P Green Bond Select Index.
Investment Manager News
- Brown Advisory, an independent investment management and strategic advisory firm, announced this week the launch of the Brown Advisory Sustainable Bond Fund, which seeks to deliver attractive risk-adjusted returns over time by incorporating rigorous environmental, social and governance (ESG) research.
- Issuers of ETFs are not shy about cutting fees on their products in an effort to attract more assets from investors. No corner of the ETF universe is off limits when it comes to sponsors trimming fees, and that sentiment is being confirmed once again as BlackRock, Inc.'s iShares unit announced expense ratio reductions on several of its ETFs aimed at ESG investing principles. BlackRock's iShares unit, the world's largest ETF sponsor, has eight ETFs aimed at sustainable investing themes, several of which are dedicated ESG funds.
The Rohatyn Group to Acquire Grantham, Mayo, Van Otterloo & Co. Renewable Resources l Business WireUniversity of California Endowment Revamps Asset Allocation in Turn to More Private Assets l Pensions & InvestmentsScientists Fear Trump Will Dismiss Blunt Climate Report l The New York TimesClimate Report Could Force Trump to Choose Between Science and His Base l The New York Times
- The Rohatyn Group (“TRG”), a specialized asset management firm focused on emerging markets, global investment management firm Grantham, Mayo, Van Otterloo & Co. LLC (“GMO”), and GMO Renewable Resources, LLC (“GMORR”), a joint venture between GMO and the GMORR principals that invests in forestry and agriculture opportunities, today announced that they have entered into a definitive agreement whereby TRG will acquire the GMORR business from GMO and the GMORR principals. Under the agreement, the team from GMORR is expected to move, intact, to TRG. GMO, which currently owns 51% of the GMORR joint venture, with the GMORR principals owning 49%, will retain its investments in funds managed by GMORR.
- TruValue Labs today announced the ESG Momentum score, the first ESG indicator that leverages artificial intelligence, big data and the SASB materiality framework. The score reveals the direction, or trend, of ESG performance based on daily data. ESG Momentum was built to serve investment professionals who know that today's company valuations depend on performance in the areas of ESG.
General Higher Education Endowment & Sustainability News
- The $10.6 billion University of California endowment is embarking on a major asset allocation restructure that will cut the amount invested in equities by a third and put a new emphasis on private market investments, adding more dollars into private equity, absolute-return strategies, and real assets. The new asset allocation for the Oakland-based endowment cuts equities to 30% from 45% of the endowment, shows a webcast of the UC Regents investment subcommittee on July 11. Private equity increases to 22.5% from 11.2% and absolute-return strategies increase to 25% from 18%.
- Oxford Endowment Fund, Oxford, England, returned 16.4% over the year ended Dec. 31, bolstering assets by 23.3% to £2.34 billion ($2.9 billion). The latest annual report, published by Oxford University Endowment Management, an Oxford University subsidiary and manager of the assets, said the fund had returned an annualized 11% over the three years ended Dec. 31 and an annualized 11.8% return over the five-year period. It returned 7.6% in 2015.
- Sustainability professionals from around the world will gather at Yale University this September 12-15 for four days of thought-provoking lectures and interactive discussions at the Yale Sustainability Leadership Forum. The Forum’s small class size fosters an environment of idea sharing and gives participants and speakers an opportunity to interact one-on-one. Speakers are distinguished thought leaders and innovators drawn from Yale's renowned Law School, School of Management, and School of Forestry & Environmental Studies, as well as leading practitioners in government and industry.
- Ashoka U announced this week that three additional institutions of higher education have joined its network of Changemaker Campuses, expanding the network’s global presence to over 40 institutions across eight countries. The new Changemaker Campuses are Colegio de Estudios Superiores de Administración (CESA), a private business school in Bogotá, Colombia; Mount Royal University, a public institution in Calgary, Canada; and Simon Fraser University, a public research institution in Vancouver, Canada.
- The Photons for the Future scholarship program for students pursuing a degrees in scientific fields has one of the college's (and galaxy's) biggest donors — the sun. In order to fund the $1,000 scholarships, the university will be using the monetary savings generated by the recent installation of 25 solar panels on campus. According to Patrick McKee, EKU's sustainability manager, the system which was installed last week near the newly completed second phase of the university's science building is predicted to generate approximately 10,300 kWh of energy per year.
- Leaders of 125 cities, nine states, 902 businesses and investors, and 183 colleges and universities recently signed an open letter committing to concrete emissions reductions that align with the Paris agreement goals. These institutional commitments to reducing emissions are crucial, but to be effective, they must be part of a more comprehensive strategy that works toward systemic change. Putting a price on carbon has the potential to create meaningful policy and behavioral changes nationwide. More than 30 college and university presidents — the Leadership Circle — have announced public support for the “Put a Price on It” campaign, an initiative that advocates for carbon pricing as a fair, achievable, and powerful policy response to climate change.
Climate Risk, Science & Regulation
- The average temperature in the United States has risen rapidly and drastically since 1980, and recent decades have been the warmest of the past 1,500 years, according to a sweeping federal climate change report awaiting approval by the Trump administration. The draft report by scientists from 13 federal agencies concludes that Americans are feeling the effects of climate change right now. It directly contradicts claims by President Trump and members of his cabinet who say that the human contribution to climate change is uncertain, and that the ability to predict the effects is limited. “Evidence for a changing climate abounds, from the top of the atmosphere to the depths of the oceans,” a draft of the report states.
Fossil Fuel Subsidies are a Staggering $5 Trillion per Year l The Guardian
- Fossil fuels have two major problems that paint a dim picture for their future energy dominance. These problems are inter-related but still should be discussed separately. First, they cause climate change. We know that, we’ve known it for decades, and we know that continued use of fossil fuels will cause enormous worldwide economic and social consequences. Second, fossil fuels are expensive. Much of their costs are hidden, however, as subsidies. If people knew how large their subsidies were, there would be a backlash against them from so-called financial conservatives. A new study finds 6.5% of global GDP goes to subsidizing fossil fuels.
- The impending release of a key government report on climate change will force President Trump to choose between accepting the conclusions of his administration’s scientists and the demands of his conservative supporters, who remain deeply unconvinced that humans are the cause of the planet’s warming. A White House official said on Tuesday that it was still reviewing the draft document that was written by scientists, some of whom have said they fear Mr. Trump will seek to bury it or alter its contents before it is formally released. Sarah Huckabee Sanders, the White House press secretary, said the administration would not comment on the report before its scheduled release this fall.
Global Funding in Sustainable Energy Tops $1 Billion in First Half of 2017 l The National Law Review
- This year is proving to be the year of investing in innovative energy technology. Mercom Capital Group reports that in the first half of 2017, over $1 billion in venture capital and private equity funding has been invested in battery storage, smart grid and energy efficiency companies worldwide, exceeding the first-half funding benchmarks in 2014, 2015, and 2016.
Fossil Fuel Divestment
Does Divestment Evangelize or Enable the Fossil Fuel Industry? l America Magazine
- How are we to deal with fossil fuel companies that fight the world’s shift to renewables, fund bogus research attacking climate change and generally strip-mine local communities’ tomorrows for short-term profits today? This article discusses how Jesuit Colleges and Universities can use their faith as a lens to approach divestment and shareholder engagement conversations.
San Francisco Board Split on Staff-Opposed Measure to Divest Fossil-Fuel Companies l Pensions & Investments
- The investment staff of the San Francisco City & County Employees' Retirement System and its general investment consultant, NEPC, have come out in opposition to a plan to divest fossil-fuel company holdings, including industry giants like Exxon Mobil, Royal Dutch Shell and Chevron Corp. Meanwhile, the retirement board is split on how they will vote, four years after the San Francisco Board of Supervisors passed a resolution calling on the $23 billion pension fund to divest of fossil-fuel company securities.
l IR Magazine
- Three coal companies have avoided divestment from Calpers by convincing the US pension fund they planned to make significant changes to their business models. This week Calpers announced it had divested from 14 thermal coal companies, which mine coal for electricity generation, to meet the requirements of a law passed in 2015 aimed at reducing California’s reliance on carbon. The law, which applies to both Calpers and CalSTRS, required the pension funds to divest from coal holdings by July 1, 2017 unless the companies in question had plans to increase their focus on clean energy sources. In a report describing its adherence with the law, Calpers reveals that three companies – Banpu of Thailand, Exxaro Resources of South Africa and PT Adaro Energy of Indonesia – side-stepped divestment following engagement with the fund.
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